Michael Jensen @GenesisGains: "Hello everyone, From “deal imminent”..."

Denmark

Hello everyone, From “deal imminent” to missiles flying again in less than 36 hours. Wall Street really does move fast these days. Markets were once again fed headlines about a potential Iran deal, oil immediately dropped, equities rallied, and then reality returned shortly after as tensions in the Middle East escalated again around Hormuz. Yet somehow the official narrative still insists the ceasefire is “alive.” Apparently if you call it peace loudly enough while missiles are flying, the market may just believe you. For investors though, the real issue is not politics itself — it is what this means for inflation, energy prices and supply chains. Hormuz remains one of the most important choke points in the global economy. If disruptions intensify, oil prices can move sharply higher again, which would complicate the Fed’s path toward rate cuts. That is why every rumor, leak or “insider report” suddenly becomes market moving material. At the same time another issue is quietly becoming more important: rare earths and strategic materials. Some prices have reportedly exploded higher as China appears increasingly willing to tighten exports again. That matters because AI infrastructure, semiconductors, defense systems and advanced manufacturing all depend on these materials. And that creates the market’s current contradiction: Wall Street is pricing in endless AI growth while largely ignoring the growing fragility of the supply chains needed to support it. Nevertheless the rally continues. The $NSDQ100 is sitting around 28735 while the $SPX500 trades near 7370, powered mainly by the same mega cap AI names such as $NVDA (NVIDIA Corporation) Apple, Amazon and $AVGO (Broadcom Inc) . These giants continue carrying an enormous share of the market’s gains. Underneath the surface however, things are not quite as perfect as the index charts suggest. Small caps have started weakening again, $OIL volatility remains elevated, inflation expectations are creeping higher, and several companies are now warning that lower income consumers are increasingly running out of spending power. Data center costs continue rising, energy is becoming more expensive, and financing conditions are still relatively tight. But for now, none of that seems strong enough to break the AI momentum trade. Liquidity and investor positioning continue overpowering most macro concerns, at least temporarily. As long as capital keeps flowing into the mega cap AI complex, the broader indices can remain elevated even while underlying market breadth weakens. Today’s US labor market data could therefore become very important. A softer report would likely strengthen hopes for future Fed cuts, while a hotter number could quickly bring inflation fears back into focus again — especially with geopolitical tensions and oil risks still lingering in the background. For now, the market mood can probably best be summarized like this: Missiles are temporary. AI is forever. At least that is what Wall Street is currently trying very hard to believe.

Not investment advice. The author may have financial interests in the mentioned instruments.